Updated Project Information Document (PID) Report No: AB147

Transcription

1 Project Name Region Sector Theme Project Borrower(s) Implementing Agency(ies) Environment Category Date Prepared September 2, 2004 Auth Appr/Negs Date July 22, 2004 Bank Approval Date November 16, 2004 Updated Project Information Document () Report No: AB147 PHILIPPINES - LAND ADMINISTRATION AND MGT II East Asia and Pacific Region General public administration sector (50%); General agriculture, fishing and forestry sector (50%) Land management (P); Other public sector governance (P); Other rural development (S); Other urban development (S) P GOVERNMENT OF THE PHILIPPINES DEPT. OF ENVIRONMENT AND NATURAL RESOURCES Address: DENR Building, Visayas Avenue, Diliman, Quezon City, Philippines Contact Person: Mylene Albano, Assistant Secretary and Executive Director, LAMP Program Tel: Fax: "LAMP-PMO" <lamp@denr.gov.ph> B (Partial Assessment) 1. Country and Sector Background Land administration system in the Philippines is neither efficient nor effective, creating a bottleneck for sustainable rural as well as urban development. It is considered as one of the most inefficient land administration in the World. The number of days taken to register land transaction came second to last among 12 countries included in the World Bank sponsored investment climate survey (1993). An Informal Policy Note (IPN) on Land Management and Administration, prepared jointly by the Government and the Bank (in 1997), highlighted the inefficient and inequitable land market as the core problem of the land sector in the Philippines. These findings were confirmed by the various policy studies undertaken under the first LAMP project. The inefficiency in the land administration system constrains economic development, reduces opportunities for the poor, and discourages sustainable management resources. This situation has arisen due to: (i) weak and inefficient institutional structure; (ii) rigid and outdated land laws and regulations; (iii) multiple and inconsistent land valuation systems used in various government agencies; and (iv) widespread corruption in land registration system. With multiple agencies involved and outdated laws, the land administration system is weak and inefficient, leading to severe land insecurity and lower government revenues from land related taxes and fees. It takes between six months to several years to obtain original title and between several weeks to a few months to register any land transaction. About a third of rural parcels are untitled. The cost of obtaining a title that can be defended in the courts is over US$2,000, one of the highest in the World. Smallholders, unable to afford land titles, are in a constant threat from land-grabbers. Even if a title is obtained, disputes are costly and time-consuming to resolve due to multiple agencies being involved in land administration and the lack of an overall institutional mechanism to resolve outstanding issues. This is exacerbated by poor land records, arising from years of illegal alteration, fire and water damage, and misplacement from transfers. The cadastral maps are also in very poor condition, and information in the registry of deeds (under LRA) cannot be searched by parcel or cadastral map number, leading to a high cost of search and long delays. These inefficiencies, combined with high land tax rates, in turn lead poor communities to rely on informal

2 2 land markets, resulting in long-term land insecurity and decreased government revenues from land-related taxes. Fragmented responsibilities for land management amongst several government agencies without appropriate mechanisms for coordination have also led to rigid and outdated land management and administration policies. For example, the land classification policy is unresponsive to several agrarian, urban, community development, and protected land programs of different government agencies, leading to problems with overlapping mandates in land management and administration processes. The classification system has also not promoted sound natural resources management. Similarly, different government agencies have developed multiple and inconsistent land valuation systems. The absence of a national land-valuation standard leads to, among other things, long court battles over compensation delaying government programs. The GOP recognized the need for a unified institutional approach to the delivery and management of land administration services and established a LAM Task force in 1999 to supervise the design and implementation of a long-term (15-20 year) program with a goal to guide the implementation of the land administration and management reform in the Philippines. Recognizing the long-term nature of the reform, the Government s strategy involved as a first step the current Land Administration and Management Project (LAMP I) as a learning and innovation project. Implementation of the LAMP I project started in 2000 and was designed to test alternative approaches to accelerated land titling and to build a sound policy and institutional foundation for the implementation of the long-term land administration and management program. LAMP I has tested the existing legal framework, procedures and the institutional coordination among the various agencies, and identified the necessary policy, legal framework and institutional reform agenda required to establish a sustainable and efficient land administration system. The policy studies undertaken under LAMPI highlighted seven priority reform agenda: (i) role, functions and services of LMB, LRA and NAMRIA be undertaken by a single, autonomous land administration agency (LAA); (ii) national appraisal authority (NAA) be established; (iii) Judicial land titling will cease and will be replaced by administrative processes of land titling; (iv) titles to land be based on peaceful possession of land, with the duration based on the civil code; (v) review of land taxes; (vi) removal of the requirement of tax payment prior to the issuance of land title; and (vii) establishment of a market based property valuation system. The policy report highlighted the establishment of the LAA as the most urgent part of the reform agenda. The Government has endorsed several areas of the reform agenda, in particular the establishment of the LAA and the NAA. The President of the Republic of the Philippines has endorsed the LAM Task Force recommendation on the establishment of the LAA, and the National Anti-Poverty Coalition has championed the legislation to create the LAA, indicating civil society support to the reform agenda. Although support was strong, the LAA did not have adequate time to pass Congress. Support of the Bill is expected to continue during next administration. In order to improve land administration services, the LRA has initiated a parallel program on the computerization of land registration, through awarding a private contract of Build, Operate and Own to computerize the functions of the Register of Deeds. IFC has provided equity investment to the private consortium. Project implementation was delayed by a few years, and if it is implemented successfully, it will complement the objectives of the LAMP program. However, delays in implementation and disagreement between the government and the private consortium on the fees for registration and access of government to data may hinder its implementation.

3 3 2. Objectives The Land Administration and Management Program (LAMP) is a long-term commitment of the Government of the Philippines to increase land tenure security and improve the efficiency of the land titling and administration system. The overall goal of the LAMP program is to alleviate poverty and enhance economic growth by improving land tenure security and fostering the development of efficient land markets in rural and urban areas, through the development of an efficient system of land titling and administration, which is based on clear, transparent, coherent and consistent policies and laws, and is supported by an appropriate institutional structure. The proposed LAMPII addresses the GOP s medium-term goal of (i) Agriculture and Fisheries Modernization with social equity, and (ii) Good Governance, which is serves the overarching national goal of poverty reduction and growth. The development objectives of the proposed project are to increase land tenure security and improve land administration services though implementation of institutional and legal reform, realization of an accelerated land titling program, and establishment of a fair and uniform property valuation system. This would be done through: (i) development of national policies, a regulatory framework, and reform of the institutional structure for land administration and management; (ii) issuance of titles in urban and rural areas; and (iii) standardization of the land valuation system through establishment of an efficient and fair property valuation system that meets international standards. 3. Rationale for Bank's Involvement The Bank has supported many land management and administration projects throughout the world, including the four countries within the East Asia and Pacific Region (Cambodia, Indonesia, Lao PDR, and Thailand). Through these projects and other projects around the World, and through the on-going land project in the Philippines, the Bank has developed considerable expertise in integrating the necessary policy, institutional, and technical aspects of reforming land administration systems. The Bank also plays a role in facilitating dialogue among the key stakeholders, government, beneficiaries and NGOs, and through its policy and technical advice, gives the government and other stakeholders, the needed confidence in the reform agenda. 4. Description The project would include the following components: Component I: Development of Land Policy and Regulatory Framework a. Policy, Legislative and Regulatory Activities Initiated Under LAMP I b. Formulation of Policies on Government Land Management c. Information Dissemination and Consensus Building Component II: Institutional Development and Capacity Building a. Strengthen Existing Coordination Arrangements for Land Administration b. Development and Implementation of Minimum Service Standards in Land Registration c. LAM Education and Training d. Transition to New Institutions Component III: Tenure Security a. Community Engagement b. Systematic Land Titling

4 4 c. Land Registration System Component IV: Property Valuation a. Development of Property Valuation Policy and Implementation of Institutional Development c. Development of guidelines, standards and procedures for property valuation d. Establish Recognized Valuation Professional Body d. Implementation of property valuation system e. Valuation Education and Training Component V: Project Management a. Project Coordination and Management b. Monitoring & Evaluation and Impact Assessment c. Public Relations 5. Financing Source (Total ( US$m)) BORROWER ($13.10) IBRD ($32.70) AUSTRALIA: AUSTRALIAN AGENCY FOR INTERNATIONAL DEVELOPMENT ($8.50) Total Project Cost: $ Implementation DENR will manage components I, II, III, and V and DoF will manage component IV. The LAM presidential Task Force will serve as a project steering committee, which will oversee policy development and project implementation. Financial management and procurement would be managed by the unified PMO (UPMO) under DENR. Actual project coordination and implementation will be streamlined within the existing structure of DENR. The policy and technical aspects of the project will be under the Undersecretary/Assistant Sec who oversees land issues in DENR. The Undersec/Assistant Sec will be assisted by a full-time project director and a technical team who will be responsible for coordinating all aspects of the project. Actual project implementation will be undertaken at the Regional and Provincial levels. A Regional Implementation Unit (RIU) will be established in each of the DENR regional offices participating in the project. The RIU will be responsible for procurement, financial management, monitoring and provide overall support to the provincial implementation units. The Provincial Project Implementation Units (PPIUs) will be responsible for actual project implementation. The Unit will be responsible for the adjudication teams, CIM production, land title verifications, free patent issuance and provide support to the OSS. The PPIU will be supported by the Regional DENR PIU on procurement, financial management, and other project related aspects. Component IV will be managed by the new unit on property valuation to be established under the BLGF. Procurement and financial management will be undertaken under the same unit with support from the UPMO under DENR. The development and testing of the revised guidelines, piloting and development of the property education program will be managed by the BLGF. Actual implementation of property valuation will be done through the local governments assessor offices in the provinces.

5 5 Local government units (LGUs) will take active leadership and role in the project through their leadership of the local steering committee which will be chaired by the governor. The local steering committee will be responsible for approving annual workprograms, monitor progress in implementation and ensures good coordination among the implementing agencies at the local level. As noted above, strong LGU commitment and ownership would be key criteria in the selection of the project areas. 7. Sustainability A number of actions will be taken to ensure project sustainability. First, to ensure that benefits of first-time titling are sustained through registration of subsequent transactions, the project will support education within the community explaining the importance of formal registration for land tenure security and conflict reduction within the community. The project will develop a proposal for government consideration for an appropriate tax and fee structure on land registration reflecting people s willingness to pay for continued tenure security and community well being. Second, the project will support the development of institutional capacity that will sustain titling and registration activities after the project is completed. Development of an efficient land registration system will help build capacity to manage title transfers on an ongoing basis once properties are registered in the land offices. 8. Lessons learned from past operations in the country/sector The mid-term review and the last supervision mission of the LAMP has identified the following lessons which are being incorporated in the project design: Underestimating the complexity of the existing legal framework for the issuance of land titles. The existing legal framework in the Philippines does not provide for administrative systematic land titling similar to most of the countries in the Region (Thailand, Indonesia, Laos, and Cambodia). Instead, original titling of land could be provided by various procedures (free patent, judicial, or homestead patent procedure). The homestead patent is inadequate and not acceptable to the community because of the many restrictions it carries. The judicial titling procedure is too complex and very expensive. Moreover, this feature of multiple procedures has been a source of conflicting titling decisions, unnecessary duplication of activity, and avoidable costs and delays. The proposed project design would use the free patent, which is more promising. The free patent, while has many advantages, is still restrictive and may not generate the intended social and economic benefits without removing these restrictions. At this stage, it is clear that there is a need to reform the free patent in at least three areas: (i) reduction of the period of occupation from 42-year to 10-year period of prescription as per the civil code; (ii) removing the restrictions of transfer and mortgaging (for the 5 years); and (iii) extending the free patent law to residential areas. Underestimating the commitment to status-quo of some of the sectoral institutions. The delivery of land administration services is hampered by current institutional arrangements and operating procedures that are self-serving and are not strongly focused on serving the needs of the public. The proposed project design is based on introducing administrative changes in the existing procedures through the establishment of the One Stop Shop and setting and monitoring minimum service standards. At the same time, the project would continue the push for the establishment of one Land Agency. Underestimating the general incompleteness of land records. Some of the measures recommended to address the general incompleteness of records include consolidation of registration of land titles, updating of maps for land planning using 1:10,000 scale using modern technology, computerization of records management with public access to records, and involvement of private sector in work to update the system for land records.

6 6 Overestimating the technical capacity in the sectoral institutions. By regional standards the technical capacity in the various land management institutions is relatively weak due to the multiplicity of institutions which did not permit any institution to invest adequately on their staff. The project design addresses technical capacity issues both through training in sectoral institutions and through development of land management and property valuation education program in national universities. Overseas tours will also be conducted, and overseas scholarships for advanced study will be offered. 9. Environment Aspects (including any public consultation) Issues : The environmental effects of the project, if any, are minor and indirect. Other than the minor civil works activities for the construction of office buildings, field land offices and adjudication centers, the project will not support land titling in areas of environmental significance until after decisions have been made with regard to its status and boundaries nor will it support land conversion and other huge civil works that would adversely affect the environment. All buildings will be designed and constructed in accordance with sound architectural and engineering practices. A screening procedure, which will consider the DENR project thresholds as regard EA coverage or non-coverage, will be conducted to screen and address the direct impacts from civil works. All contracts will include clauses for construction site management and adherence to appropriate dust and noise control, proper disposal of solid wastes, sanitary facilities and occupational health and safety. Detailed analysis of the project s environmental impact appears in Annex List of factual technical documents: Policy Studies Integration Report Fees and Finance Policy Study Report on Finance and Fees on Real Property Land Valuation Policy Study Report Land Valuation Policy Study Report, Volume 2 Land Laws and Regulations Policy Study, Final Report, Volume 1 Land Laws and Regulations Policy Study, Final Report, Volume 2 Institutional Arrangements Policy Study August 2002 June 2002 Institutional Arrangements Policy June 2002 Government of Philippines Department of Justice, Department of Justice,

7 7 Study, Annexes Land Administration Reform Bill 2003 Land Administration Reform Act, Progress Report DENR Administrative Order No June 2003 June 2003 June 2002 Government of the Philippines Government of the Philippines Government of the Philippines 11. Contact Point: Task Manager Wael Zakout The World Bank 1818 H Street, NW Washington D.C Telephone: (202) Fax: (202) For information on other project related documents contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C Telephone: (202) Fax: (202) Web: Note: This is information on an evolving project. Certain components may not be necessarily included in the final project.